Driller Pioneer Energy’s fourth-quarter loss narrowly beats estimates

Pioneer Energy, which partnered with McDonald Observatory on lighting tests, has restructured debt and sold its older drilling rigs to navigate through the downturn. It now has a fleet of 31 drilling rigs, 14 of which are working currently.

Photo: McDonald Observatory

Contract driller Pioneer Energy Services landed in the red in the fourth quarter of 2015, but lost less money than Wall Street had expected.

San Antonio-based Pioneer Energy provides land contract drilling and production services, but demand for its services has fallen during an extended oil price crash. Its clients have canceled contracts for 19 of its drilling rigs since late 2014, choosing to pay early termination fees rather than drill new wells.

On Wednesday, the drilling company reported a net loss of $48.3 million, or 75 cents per share, compared with a net loss of $47.6 million in the year-earlier quarter.

Your browser does not support the iframe HTML tag.
Try viewing this in a modern browser like Chrome, Safari, Firefox or Internet Explorer 9 or later.

Excluding one-time items, the adjusted net loss for the fourth quarter of 2015 was $16.1 million, or 25 cents per share, compared with income of $2.9 million, or 4 cents per share, in the year-earlier period.

Analysts had projected that Pioneer Energy would lose 26 cents a share, according to the average estimate of 13 analysts polled by Thomson Financial Network.

Pioneer Energy has restructured debt and sold its older drilling rigs to navigate through the downturn. Executives said Wednesday they expect to be able to operate this year off of cash flow and the sale of a handful of rigs.

“All in all, I think we are managing through the downturn very well,” CEO Stacy Locke told analysts in a call Wednesday. “We’ve cut a lot of cost out of the businesses.”

Pioneer Energy sold off 32 of its older rigs and other equipment in 2015 and is still looking to sell four drilling rigs in Colombia. Locke said the company was one of the first firms last year to send some equipment to auction as the downturn gained momentum. But it doesn’t plan to turn to auctions again. “That market has probably deteriorated,” Locke said. “We’re not in any rush to go to auction.”

It now has a fleet of 31 drilling rigs, 14 of which are working currently. Though executives said it’s hard to get “visibility” about where the oil market is heading, Pioneer Energy expects the end of the year to be better than the start of 2016. Locke said a few more rigs likely will return to work in the next three to six months.

The CEO also said the company’s remaining, newer fleet of rigs is drilling faster than peers, as well as moving faster between locations, and that the company continues to win safety awards. “The rigs we have are clearly outperforming,” Locke said. “We are the safest. This will drive demand when demand returns to the market.”

Its utilization rate for its well servicing rigs was 55 percent in the fourth quarter, down from 90 percent in the year-earlier quarter.

Your browser does not support the iframe HTML tag.
Try viewing this in a modern browser like Chrome, Safari, Firefox or Internet Explorer 9 or later.

The San Antonio drilling company was one of several Texas energy firms reporting rocky results Wednesday.

Marathon Oil Corp., one of the largest operators in South Texas, reported an adjusted net loss of $869 million, or $1.28 per share, after the market closed Wednesday.

Marathon said it plans to spend about $600 million in the Eagle Ford Shale this year, where it will run five drilling rigs, down from 11 rigs last year.

Marathon holds about 180,000 net acres in the Eagle Ford in Atascosa, DeWitt, Frio, Gonzales and Karnes counties. It produced 128,000 barrels of oil equivalent per day in the fourth quarter in South Texas.

Noble Energy, which has about 50,000 net acres primarily in Dimmit and Webb counties in South Texas, reported adjusted net income of $191 million, or 44 cents per share, for the fourth quarter. Noble acquired Rosetta Resources in the third quarter of 2015.

Noble said it plans to use just one to two drilling rigs combined between the Eagle Ford and the Delaware Basin, part of the Permian Basin in West Texas. It holds about 51,000 acres in the Permian Basin.

Jennifer Hiller covers the Eagle Ford Shale, the massive oil and gas field in South Texas. She previously covered real estate, development and architecture for the Express-News. Jennifer has worked at several newspapers across Texas, as well as at the Honolulu Advertiser and Arkansas Democrat-Gazette. She's a Houston native and a graduate of the University of Texas at Austin, where she received a degree in journalism.